Laurel company cashing in on Bakken housing boom

1/9/2013 2:00 PM
By Associated Press

LAUREL, Mont. (AP) — Last spring, Daniel Boman and Jim Auth were working hard to establish a modular housing plant in Puerto Rico.

They had purchased an assembly line in Georgia and shipped it to Puerto Rico. In the midst of that project, a partner in the business, who was also involved in the oil industry, told Boman that modular housing might be just the thing for the booming Bakken oil region in North Dakota and Eastern Montana.

In May, Boman attended a Bakken Housing Summit in Williston, N.D., where 350 builders and developers from around the country learned of oil-boom opportunities in the region.

For Boman, those opportunities were hard to resist.

"We called our partners in Puerto Rico and said, 'We're going to disappear for a while. We're going to Montana.'"

They opened System Building Solutions in the old Boise Cascade plant in Laurel, now owned by Fox Lumber Sales of Hamilton, on Nov. 1. Boman is the president and CEO and Auth is his plant manager. They have nine workers so far, who are getting on-the-job training by building a two-story, 20-room modular housing unit designed for use as an oil field man camp.

SBS plans to hire another nine workers in early February and then nine more every month for at least a year. Boman said they picked that number because it's the best size for training a new crew.

The production of high-density housing is the niche Boman sees his company filling, but he's open to anything his clients might want.

"What we are bringing to the market is simply construction capacity," Boman said. "If someone comes to us and says 'We want to build 500 single-family homes,' OK. We will consider that."

Once Boman and Auth zeroed in on the Bakken, the next step was finding a good location. They wanted to be outside what Boman called "the boom effect," so that their own workers wouldn't have to compete for the expensive housing in the oil fields, but close enough to make a delivery from the plant and return the same day.

That made the Billings area look ideal. When they found out that there was not only a large enough building available in Laurel, but one that had been built to produce modular homes, Boman and Auth were feeling pretty lucky.

"I can't even imagine a better place to do what we're doing here," Boman said. "It's unbelievable."

He was also impressed at the level of assistance available locally. He worked closely with Jeremy Vannatta, director of business outreach at Big Sky Economic Development, who helped the company find the old Boise Cascade building in Laurel.

Vannatta said the economic development agency also helped System Building Solutions get settled in Montana and tap into the markets in Eastern Montana and North Dakota.

Vannatta said every new business has different needs in terms of using the services provided by the economic development agency.

"Daniel was one of those who took full advantage of what we had to offer," he said. Vannatta also put Boman in touch with Dale Detrick, with the Montana Manufacturing Extension Service, who introduced him to numerous other area businesses that had goods and services to offer.

System Building Solutions is using lumber from its landlord, Fox Lumber Sales, which has owned the old Boise Cascade building, at 203 E. Railroad St., since the early 1990s. Fox shares the 80,000-square-foot main building with SBS and owns an adjoining 20,000-square-foot building where it makes trusses.

Boman said his company is also using Bob's Welding of Laurel for its metal fabrication and the Laurel Outlook for its printing needs. For the cabinetry in its modular housing, SBS turned to a neighboring business, Square One Cabinets.

CTA Architects Engineers of Billings drew up plans for the company's prototype modular housing unit, and SBS is using the Avitus Group of Billings to do all its bookkeeping, human resources work, taxes and payroll.

Boman said having the Avitus Group performing the company's office functions means that he and Auth can concentrate on the basics: "Building boxes. That's what we do."

Boman is a native of Sweden who has been in the United States for 25 years. He came here to set up an international student exchange program and ended up staying. He got involved in real estate and then in construction, and for the past 10 years he has been an authorized builder for Nationwide Custom Homes.

Auth, who has more than 35 years in the modular home industry, used to be a plant manager for Nationwide and has worked for various companies up and down the Atlantic Coast.

"I started swinging a hammer and progressed into management," he said.

Their prototype building is built in four modules and has 10 rooms on each of two floors. Each 12-by-12-foot room is furnished with a toilet, wash basin, shower, desk, closet and bed, with a common living room and kitchen-dining area on each floor.

The building is made for easy conversion to an extended-stay facility, which would involve eliminating the common areas and reducing the number of rooms on each floor to four, with individual kitchen areas.

Boman said he and Auth originally thought of putting their first completed building on display, by way of advertising, but they scrapped that idea. For one thing, they are selling construction, not a particular building.

For another, the need in the Bakken region is just too great. If the building could make $75 a day per room, why put it on display? They are still working on the prototype, and Boman said that while they have no firm buyers yet, they have been getting a lot of inquiries.

Boman said gearing up for expanded production is their priority, since demand in the Bakken seems destined to keep booming.